Whirled Musings

Across the Universe with Cosmic Connie, aka Connie L. Schmidt...or maybe just through the dung-filled streets and murky swamps of pop culture -- more specifically, the New-Age/New-Wage crowd, pop spirituality & religion, pop psychology, self(ish)-help, business babble, media silliness, & related (or occasionally unrelated) matters of consequence. Hope you're wearing boots. (By the way, the "Cosmic" bit in my moniker is IRONIC.)

Saturday, November 17, 2012

Kevin Trudeau exposé on KSHB-TV: buzz, backlash, and big beginnings

As you probably know by now, KSHB-TV, the Kansas City, Missouri NBC affiliate, aired an investigative story by Emmy Award winning reporter Ryan Kath on Monday evening (November 12), regarding Kevin Trudeau's scammy scheme, the Global Information Network (GIN). Not surprisingly, there's been a lot of buzz, both pro and con, about the piece and its implications. In the increasingly unlikely event that you haven't seen this story yet, here's the link on the KSHB-TV web site. The comments are as interesting as the story, so be sure to read those too.

A couple of nights after the first story was aired, Ryan Kath presented a brief follow-up.
Here's that link. You can also get to it by clicking on the graphic at the top of this post.

Of the follow-up,
Ryan wrote this on his Facebook page:

Since our story aired, I've fielded questions about whether Global Information Network will be investigated. We spoke to a former federal prosecutor about this possibility. He looked through the court documents that raise questions about GIN's finances (money laundering, etc.). He also said authorities would try to differentiate between what he described as "sales puffery" (i.e. "This is the greatest investment ever") vs. specific promises of money not being fulfilled (i.e. claims about $10K bonus payments, etc.). Credible evidence of the latter is what could determine a criminal fraud case.
Abe Husein, the Kansas City resident and ex-GIN member who approached Ryan in the first place about this story, and whose own GIN tale was showcased in the piece, wrote that he and a few others are now working with local attorneys to explore the possibility of a lawsuit centered around GIN's false claims. Here is my response (if you'll pardon my quoting myself at length; I'm just too lazy to reinvent the wheel at this point):
...where potential criminal charges are concerned, it seems to me (though of course I am not an attorney) that Trudeau is a slippery one. He could potentially get himself into all sorts of trouble with the SEC and other authorities for doling out actual investment advice or clearly presenting GIN as an investment or business opportunity, and I imagine there are ways he could get into a serious legal jam for unfulfilled promises of bonuses and so forth. But I have noticed that he also uses all kinds of disclaimers, both written and spoken, as well as a lot of doublespeak, so perhaps he and his attorneys are banking on that to keep criminal fraud charges at bay. (Just look at the disclaimers on the GIN web site, for instance. They have apparently been there from the beginning.)

As for the other claims and tall tales about the GIN council and Trudeau's association with secret societies and the elite of the world, I think he is really banking on free-speech protection there. A few years ago, when he was still giving interviews,
he told the blogger who wrote the WalletPop blog that he can write and say anything he wants, that he should have the right to tell people in all seriousness that the moon is made of cheese -- and that this right should be protected.

Setting aside the legal realities concerning
the limits to free speech in marketing and advertising copy, I think Trudeau's statement indicates that he is more interested in testing and pushing the limits of free speech protection than of telling people the truth about anything.

Anyway, as far as legal action against that stupidity about the GIN council is concerned, you may be running into a brick wall, Abe. Or you may be setting a precedent. Who knows?

But there is always the weapon (or more accurately the tool) of education, as well as snark and ridicule. In the long run, these may be more effective than giving more money to lawyers. Not that I am discouraging anyone from pursuing legal remedy if they feel they have been defrauded, but realize that this is not KT's first rodeo and he no doubt has most of his bases covered where his tall tales and most of his false claims are concerned.

However, at the very least he seems to be setting himself up for more criminal contempt charges regarding the FTC matter, so there is that small comfort. On the other hand, he continues to exploit that situation to make his sheeple feel sorry for him, and give him more money.

In any event, this story is far from over, and I am glad Ryan and his colleagues are on it.
And I am glad. But as I noted in my remark -- and as Ryan seemed to be implying in his -- successful pursuit of criminal charges regarding GIN's false claims could be a challenge.

The reason I mentioned the GIN council and the secret societies in my own remark was that there had been buzz on some of the Facebook forums a few weeks ago suggesting that these lies could possibly constitute criminal fraud. A couple of folks were even suggesting mail fraud charges were a possibility, since some of the promotional material was sent via direct mail (in addition to being posted on the Internet or broadcast via infomercials). However, given that the people suggesting the possibility of criminal fraud charges for the tall tales were some who had their own agendas in sucking in the ex-GIN, I took those suggestions with a grain of pink Himalayan salt.

In any case, my sense is that specific (broken) promises about payouts may be a better lawsuit target than the stupid stories about the GIN council and whatnot. Then again, I am, as I noted, not an attorney... so who knows?

One story can only do so much (but that may be a lot)
As I mentioned above, there's been a lot of buzz about this story, pro and con. If the snippets I've seen quoted on various Facebook forums are any indication, GIN defenders are working overtime to discourage their peeps from reading the story. (Can you say, "cult tactics," boys and girls?)

But even some anti-GIN/anti-KT forces seemed disappointed and a little let down about the investigative story. Some noted that it was only a little over eight minutes long, and couldn't have possibly covered all of the bases in that time. Some seemed disappointed that the airing of this story did not devastate GIN and Trudeau in some very obvious way right off the bat. Apparently some were expecting a nearly instantaneous end to GIN as a result of this one story. (No doubt that was partly because people such as
not-Doctor Leonard Coldwell, former b.f.f. to Kevin Trudeau but one of his loudest detractors since he was reportedly forced out of GIN, was going on and on and on about it for weeks before the story aired. He's been yapping nonstop about how this story will be "the end of Kevin Trudeau and the Global Information Network.")

First off, as I've harped about many times before, GIN is a big, sick machine that is part of an even bigger and sicker machine, and one story is not going to drive a stake into its heart. But I think it's a very important story nevertheless.

Secondly, the story was obviously cut to fit the format of the local news show. And there is no doubt that the project was given a very thorough vetting by the station's legal department, which may have cut it even more than originally intended. But I think the fact that it happened at all is a victory. It is going viral and the ex-GIN are giving it more legs than your normal "local" investigative news story. So I would advise people not to underestimate this effort.

Of course the backlash from Kool-Aid guzzlers was expected and so far has been predictable, and very amusing. You can see some of that on the KSHB-TV web site.
Here's that link again.

Besides the expected babble from pro-GIN and KT fans about how the FTC or some other evil big force must have been behind the news story, there has also been the expected grumbling about the KSHB-TV news crew for going "underground" at the GIN "Family Reunion" in Nashville. They were criticized for being sneaky and underhanded, and for invading the privacy of attendees, including those whose faces were blurred. They were also criticized for being biased and having an agenda.

Yawn. It's much the same brand of criticism that gets slapped on virtually every investigative news story that has ever been aired or published, often from the targets themselves or from their most devoted advocates. But in this case the target -- that would be Trudeau -- didn't agree to an interview, so the news team had to settle for speaking with some of the GIN guzzlers in Nashville.

I have no doubt that Ryan Kath and his team were expecting the backlash. I also have no doubt they had all of their legal bases covered. As for ethical debates about "invasion of privacy" -- well, those have been going on for as long as investigative journalism has existed.

Demagogues and demographics
The investigative news story has also been criticized by some for showcasing Abe Husein as a victim of the GIN con. Granted, Abe may not be the most sympathetic character in some people's eyes. He is young, brash, and obviously ambitious. He admitted that he knew about Trudeau's past but still jumped into GIN, assuming (or perhaps just hoping) that Trudeau had changed. By his own admission he tried very aggressively to get many people to sign up for GIN. Although this was not really noted in the news story, Abe apparently ended up "sponsoring" (paying for) others' memberships so he could reach Platinum level and get a promised bonus. In all, he laid out upwards of $30,000, by his own estimate. Some GIN defenders have cried foul, saying that Abe was "cheating" the system, and that Trudeau himself has repeatedly warned against doing this.

Yet -- and this is something I have argued with GIN defenders and Abe detractors -- the GIN system allowed this sort of thing, when it could have easily been prevented. The GIN administrators could certainly have tracked the source of fee payments to make sure people were not "cheating." But my guess is that the money mattered to Trudeau more than the "ethics." Abe gambled, and apparently lost (though that story isn't over yet either). But I still think he did a very good thing by taking it to the media.

Moreover, as may be obvious, Abe was featured on the Kansas City story not only because he was the one who had the initiative to approach a reporter, who in turn had the vision to see that there was a much larger story here -- but also because this was originally a "local" story, with a mandate to focus on "local" people. But, as should be obvious by now, this story is much bigger than one station's eight-minute offering, and much broader than the Kansas City metro area. It is going national and international, and not just on the NBC network. That was inevitable, given the fact that the story was already spreading all over the Internet almost before it was aired.

People should also keep in mind that Abe's is just one story of many. Even Ryan Kath would probably acknowledge that Abe is not representative of the GIN demographic. Apparently there is no representative demographic. As I have pointed out several times on this blog (
including here), GIN/Trudeau have marketed to, and attracted, a very diverse demographic. This article from a Kansas City PR firm's site drives the point home:
Kath and [his colleague Michael] Butler signed up as “affiliates” for the [GIN Family Reunion in Nashville in October], which meant they were not members yet. Affiliates are interested in recruiting members to GIN and receiving a portion of the commission.

“The thing that amazed me the most about the conference was the diverse crowd: people of all ages and all demographics, coming to Nashville from all points of the globe,”
[Kath] says. “People we spoke with at the conference had an overwhelmingly positive take on GIN. Many told us it had changed their lives. Some people really enjoyed the motivational speeches and the support structure. Others liked the networking and the ability to meet people from around the world.”

Kath says there was no major common denominator among attendees at the conference.

“Some people were in the midst of a career change, but others seemed to have stable jobs,” he notes. “For instance, there was a Kansas City area business owner at the conference who was a Level 6 member.
[It costs $25,000 to upgrade to Level 6. ~CC] This means he has probably paid at least $40,000 in membership dues and level upgrades (not to mention travel costs to events like the one in Nashville). I contacted him for an interview, but never heard back.”

I was first really struck by the broad demographics last year when watching videos taken at GIN events. As the camera panned over the audience I saw people of all ages, looking starstruck. The brash young males were far from the only ones in these crowds.

Media: a two-edged sword
Where the TV stations are concerned, the elephant in the room is TV's longstanding complicity -- and of course I am talking about networks and individual stations alike -- in keeping the big sick machine running. I've mentioned this before one or two times, or maybe a dozen or a hundred times, but it bears mentioning again. Obviously, TV stations benefit from the infomercial revenue from some of the very people their investigative reporters try to expose. They also benefit from ad revenue on their talk shows and other content that glorify self-help industry players. (Oprah, anyone?)

So while they may offer the occasional exposé of a nationally or internationally known scammer (or selfish-help/New-Wage/McSpirituality guru with fingers in the Scamworld pie), they are NOT going to crap in their own nest too much. And of course they have to be particularly careful to do what they can to avoid lawsuits from their targets. (People have been laughing at Trudeau's "in-house" lawyers, but I wonder what his REAL legal team is cooking up behind the scenes.)

I imagine that the factors listed above are a constant source of frustration for Ryan Kath and his colleagues at the station, as well as for investigative reporters in similar positions all over the US. Time constraints within an evening news format are frustrating enough, but the fact that the TV news departments long ago became profit centers has tainted TV journalism far more than any "liberal bias" (or "conservative bias" in some cases) ever could. And the fact that there is a lawyer waiting around every corner these days adds to the frustration.

And then we have to take into account that even now there is widespread indifference about GIN-ish types of fraud. Even while the story was airing in real time, a woman on the KSHB-TV Facebook page threatened to change the channel if they didn't start reporting "real" news.

And of course there are the victim blamers: the ones who say that anyone with common sense and/or critical thinking skills should have known better than to trust Kevin Trudeau. I have said or implied that myself, and it occurs to me sometimes how arrogant and self righteous I must sound.

The truth is that we all have the capacity to be fooled and manipulated and persuaded to do something that is not in our best interests. It may not be by Trudeau. It may be by another infomercial predator, or a politician, or an accused sex predator masquerading as a healer. But we are all vulnerable.

I have mentioned this before on numerous forums, but it was actually the foul-mouthed Salty Droid and some of his other readers who helped make me more compassionate and understanding about these things. In addition, reading and hearing personal GIN stories reminded me again that even smart people were fooled by Trudeau.

On the other hand, I don't cut much slack for those who personally knew Kevin Trudeau for many years and yet still went along with the fraud -- particularly if they are still trying to suck ex-GIN into their new MLMs and other schemes. And I am still not above poking fun at the most annoying and arrogant Kool-Aid drinkers.

My point is that even though the media have helped build the big sick machine, occasionally the mainstream journalists get in a good dig at the predators. We should celebrate every victory as it happens.

Even so, I still think that it is the task of grass-roots journalists/bloggers, activists, and advocates to pound away at these issues and show people why both the indifferent ones and the victim blamers are off base. Which is where Abe on his Facebook forums, and Bernie O'Mahony on his
GINtruth.com blog, have come in. And yes, where accused "cosmic sluts" and salty-tongued little fake robots come in too. And just for good measure, toss in Steve Salerno's SHAMblog and the ScienceBlogs and the critical thinking blogs (there's a good index of those on Skeptico's blog). They are all out there, just waiting to put rats in the heads of those with open minds.

But a little help now and then from the MSM is a good thing. Keep in mind, though, that the mainstream journalists increasingly rely on the grass-roots media and interested individuals more than may always be obvious. And who knows how far this one story from KSHB-TV -- this story that began with one pissed-off individual -- will go? William White, one of the participants in some of the private Facebook forums, wrote this (and gave me permission to quote him), regarding the possible effects of this single story:

...who knows how many thousands of people were saved from being scammed, from skipping bills and house/car payments in the name of delayed gratification, from selling family heirlooms and expensive items to upgrade, from selling jewelry and watches to allow Trudeau to afford his own, from divorces and children having to grow up with divorced parents because one parent wouldn't drink the GIN koolaid, from thousands of people being called a "loser" to their face by a best friend, from people's hearts getting broken from not making huge amounts of money, from people's professional credibility being destroyed for presenting an MLM to serious business partners, from people draining their life savings.... these are what we (but most credit above all to Abe and Bernie) saved people from today.

This wasn't a victory for those of us who were frustrated and bitter, this was a victory about stopping something disgusting from hurting many people and families all over the planet. The decision you all made to stand up and make noise about it has saved many. This was months and months of effort for a short-period of satisfaction in winning, and it was all worth it to know how many lives were spared this greedy scam. I guess we finally understand what delayed gratification feels like after all these months of effort put into this, thanks KT ;)
As Bernie O'Mahony, who also also quoted William on a recent blog post on GINtruth.com, noted, "Trudeau often states that we should indeed, sell what we can to get to the next level [of membership in GIN]."

My advice, for what it's worth: Don't listen to the people who insist that they know the day and the hour that GIN (or any other scam) will end. But never underestimate the power of a single story... or a dozen single stories.... or a hundred. And never stop doing whatever you can to knock your own little dents -- or help others knock theirs -- into the big, sick machine that is Scamworld.

PS ~ I don't think I have given due credit to Ryan Kath's colleague, Michael Butler, who worked on this project with him. Michael put this amusing and illuminating video together, showing a GIN participant pushing a frauduct based on applied kinesiology "muscle testing."

More True-dough on this Whirled:

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Anonymous Anonymous said...

You said: "I was first really struck by the broad demographics last year when watching videos taken at GIN events. As the camera panned over the audience I saw people of all ages, looking starstruck. The brash young males were far from the only ones in these crowds"

What does that mean? Are you so bent on seeing something aweful that you don't even get what you saw in the crowd was enthusiasm, excitement, and attention to the thrill of the moment? Good lord, Connie..... we are NOT groopies. Look, I'm not going to try and explain it to you if you've never had the privledge of being in attendance in a crowd like that. Think of the best concert you've ever attended and you will touch on it....

Monday, November 19, 2012 12:20:00 AM  
Anonymous Anonymous said...

In talking about Abe and others buying
GIN memberships to acheive a commissionable level you said: "Yet -- and this is something I have argued with GIN defenders and Abe detractors -- the GIN system allowed this sort of thing, when it could have easily been prevented. The GIN administrators could certainly have tracked the source of fee payments to make sure people were not "cheating." But my guess is that the money mattered to Trudeau more than the "ethics." Abe gambled, and apparently lost "

Oh you silly girl. Are you that naive?? They didn't run those amounts through their own account. You think they weren't smarter than that? They gave the money to enroll, or reimbursed the person for joining, or promised a refund, etc.... How is any company going to prevent that???

You take any company out there - ANY company where there is a cost to join and make money and ANYONE can pay those cost. This is not GIN's fault that people are unethical and will do that.

Monday, November 19, 2012 12:30:00 AM  
Blogger Cosmic Connie said...

Hi, Liz, and thanks as always for your perspectives. My point about the demographics stands -- the point being that Abe was not a representative demographic because there IS no representative demo. When watching those GIN videos, I did indeed see enthusiasm and excitement in those crowds, but in my view it was terribly misplaced. Worshiping a scammer is simply nothing to be proud of.

As for your claim that Abe or others did their own "money laundering," hey, maybe I *am* naive in that regard. But that is not even the main point. I stand by my opinion that whatever his motives are and were, Abe did a good thing by taking the story to the media. If his hands were not completely clean, that will come out one way or the other. (And I still think he is making a huge mistake by continuing to ally himself in any way with "Dr." C. But Abe is very well aware that I feel this way.)

But here's the deal: I am not out to vilify Abe. I am out to help educate people about the big scammers and the larger scams. And in my view, GIN is one of the biggest scams in Scamworld, and Kevin Trudeau is, was, and probably always will be a scammer.

Abe of course is welcome to speak for himself here.

Tuesday, November 20, 2012 10:35:00 AM  
Anonymous Anonymous said...

Found this quote in Peter Ragnars Razors Edge Newsletter. Might be appropriate for those considering GIN Membership:-
"Gullible people always get hurt in the end, and cynical people get hurt by ignoring opportunities or new teachings; in that sense, they’re hurt before they start. I’m not saying we shouldn’t be optimistic and expect the best in all endeavors; neither am I saying to ignore misgivings. We should have a dose of healthy skepticism about everything. Here are some questions you can use as guidelines: What is it? Where does it come from? How do I know it and what should I do about it? Giving honest answers to these questions can save you a world of hurt. You can apply this in many situations, not just to money or teachings."

Tuesday, November 20, 2012 3:49:00 PM  
Blogger Tom Banjo said...

Any company where there is a cost to join is pretty much a scam. Unless your lawyer hands you a contract that makes you a partner in the company, paying for the opportunity to work for a company is going to end badly (stupidly).

Even legitimate sales jobs where you work 100% on comissions aren't usually ethical companies. The reason Trudeau / Wink / Amway / Tony Robbins all make you pay to join or buy overpriced starter packs is because that is where they make money. They gouge you for a starter pack in exchange for giving you the opportunity to gouge someone else for theirs. The "product" they claim to provide is garbage, what they are really charging you for is the opportunity to sell more of their garbage for them.

The only way to justify your own participation in one of these opportunities is by saying to yourself "If I don't steal their money, someone else will" and that is the attitude from the bottom to the top. An ethical person, after spending $400.00 on a $12 package of vitamins, would realize he was scammed and take the loss. The unethical will say, "He was able to scam me with his $12 pack, I can make a lot of money selling $12 vitamin packs for $400"

Toss in some rah rah seminars (franchise support) many many hours of hard work and you will find enough suckers to maybe get your money back.

Or, when someone asks you about the MLM that just ripped you off, you can tell them "Rather than pay me for the opportunity to sell this overpriced crap, why don't you spend your time and hard work selling something legitimate? Something that you don't have to pay for upfront that doesn't require you to scam others into selling for you"

Wednesday, November 21, 2012 4:57:00 AM  
Blogger Cosmic Connie said...

Anon Tuesday, November 20, 2012 3:49:00 PM -- Re the Ragnar quotation: Good advice, I suppose, though "healthy skepticism," like so many other things, is in the eye of the beholder. In any case, Ragnar, ever the balanced and rational one, apparently still has his fingers in the GIN pie, so I am taking anything he says with my own dose of "healthy skepticism."

The more I observe Scamworld, its players, and those who are played, the closer I come to the conclusion that few if any people EVER got hurt by erring on the side of cynicism when it comes to "opportunities" from any of these jokers -- Ragnar included.

Wednesday, November 21, 2012 1:13:00 PM  
Blogger Cosmic Connie said...

Tom Banjo: Well said!

Wednesday, November 21, 2012 1:14:00 PM  
Blogger RevRon's Rants said...

Anon Tuesday, November 20, 2012 3:49:00 PM - You forgot one VERY important question that anyone should ask before entering a business arrangement: WHO is pushing it? LEGITIMATE business people will be transparent and forthright in what you can expect, rather than evade questions and blow smoke up your butt. LEGITIMATE business people will address questions and criticisms directly, rather than threaten, defame, attack, or otherwise attempt to silence the questioners (Blocking civil commenters is a BIG red flag). LEGITIMATE business people will proudly produce documentation about their scholastic achievements, rather than evade questions about them. LEGITIMATE business people will be glad to offer details about their careers. LEGITIMATE will offer products and services that stand up to scrutiny in virtually any environment. LEGITIMATE business people don't get involved in scams, period. LEGITIMATE business people _ at least, those with enough integrity to justify partnering with them - will not deride former "friends" and associates, especially after having themselves been involved in the very behaviors they deride. And finally, LEGITIMATE business people have no reason to hide their past; changing their names should be a red flag for anyone but an actor or novelist. Ignore these things, and you're quite likely to get Bernd.

Saturday, November 24, 2012 8:11:00 AM  

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